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Focus/Identity/Destiny



I wanted to pull out and amplify some of the comments made by Steve Willey during his recent speech in Japan that I feel are really important to understanding Microvision's focus, which will form its new identity:

"We're not interested at all in very small displays. We're interested in very big multimedia experiences."

"In the consumer space, Microvision is entirely focused on the interface to the handset. Our role is that delivery of these multimedia experiences to the user."

"We need to unlock the power of these multimedia devices. Whether they be handset, game players, iPods or otherwise, if everything's limited to the 2" screen, the opportunity to give the consumer an experience they will pay for is limited."

"Our products are radical and new. We believe that our greatest opportunity is to work in Japan, with Japanese partners, and to introduce these products into the Japanese market."

The greatest opportunity for Microvision is to function as the delivery mechanism of mobile internet content from the cell phone to the user. You know this. I know this. Microvision knows this, and now they are committing themselves to becoming a standard mobile internet interface in the next two years.

Imagine a dam that has a rushing river behind it, and there's a 2" square hole in the dam. The river is the potential profits from gargantuan investments in networks and digital content. The 2" hole is the current standard LCD screen. A good amount of water can spray through that tiny hole in the dam. Now if you scale up that hole in the dam to the full size of the other standard interfaces to multimedia content (HDTV widescreen displays), then there's no limitations anymore. The river flows freely. The true profit potential of mobile digital content can be achieved, for the first time.

It is really vital in this discussion to understand that Microvision does not exist in a vacuum -- the '4th screen' that only Microvision can provide will allow consumers, content owners, device manufacturers, and service providers to all benefit hugely.

For consumers, they'll be able to have access to the same quality of multimedia on their mobile phone that they do in their living room. I've had a cell phone that can download games for the last year and a half, and I've only bought two games -- a bowling game and an NFL game. I've thought about adding a couple more, but it's not really that compelling an experience compared to firing up the Xbox on my HDTV at home. The content providers try to make up for the 2" screen by pricing games at $5-7, or $3 monthly subscriptions. Even so, it's easy enough to just keep playing the bowling and football games and not load the phone up with content.

For content owners, the 4th screen offers a hugely compelling proposition. Imagine you are Electronic Arts. You've developed Madden 2007 and it's certain to be a huge hit for the PC and across the console platforms. Now, without the 4th screen, when it comes to the mobile phone version, you would be forced to create essentially a lobotomized version to fit the tiny screen -- and charge maybe a tenth the price of the full version. With a big visual experience available in an MVIS-inside mobile phone, the same content developed for PCs and consoles can be leveraged across the mobile platform. The content is compelling enough to justify the same types of prices that they get for the console version (a 10x increase over the 2" screen version!). More bang for their development buck. Huge new revenue streams. A better experience for their users. Better brand equity and loyalty.

Device manufacturers benefit as they will be the ones incorporating the IPM into their new products. They will be able to usher in a new generation of devices that will bring customers into stores and have them replace their clamshell and candy-bar phones by the millions. Companies that partner with Microvision to introduce virtual displays will be differentiated from their competitors by offering radical, new capabilities that can't be matched by the current generation of products with their traditional, physical flat-plane displays. We will see soon what the value is to one of these device manufacturers of being first-to-market with a mobile virtual display.

Service providers will benefit as they will be able to charge premium prices for this BIG EXPERIENCE mobile multimedia that's being held back by the 2" screen. There will be demand for ever greater bandwidth to fill the virtual screens and service providers will be able to offer numerous value-added services that simply could not exist in the world of the 2" display. The mobile experience is vastly improved, and really transformed. There is huge value in owning and operating cellular networks in a world where mobile digital content is ubiquitous and of a compelling, high quality. Next-generation mobile services made possible by the 4th screen, including rich mobile TV and mobile internet browsing, location-based services, transaction capabilities and social networking, as well as new types of user experiences like virtual networking (next-generation videoconferencing) will usher in new torrents of revenue for the network operators and service providers.

It has been abundantly clear to me and many readers of this website that Microvision is astonishingly undervalued based on their potential future cash flow. At this moment, the market is not pricing in any percentage likelihood of a design win for the Integrated Photonics Module (IPM) into a cell phone or cell phone companion device.

Imagine for a moment that Microvision achieves such a design win for the IPM and Color Eyewear and Picoprojector products are sold by a major handset manufacturer sometime in the near future. What then is the price of a share of MVIS? How would the market evaluate the likelihood of additional design wins?

I believe that the first commercial design win for the IPM will establish Microvision as a serious player in the mobile industry, and in the process unleash a waterfall of new opportunities for the company, as well as a market valuation that is orders of magnitude over the current one. The mobile space is huge and only growing larger. But its profit potential, for content owners, handset manufacturers, and service providers is constrained by the 2" screen. Microvision's IPM is the only solution to having a BIG EXPERIENCE in the kinds of small packages that consumers already depend on.

With focus, identity is formed. Microvision is now entirely focused is on providing a big experience to mobile internet users. Microvision now understands that its role is to be the delivery mechanism for mobile multimedia. Ultimately, Microvision's destiny is to become the standard, indispensable human-computer interface.

In order to achieve this vision, resources are being focused, discussions with strategic partners are ongoing, and goals are being set. In the 2006 Operating Plan conference call, the goal was set to sign at least one agreement with a strategic OEM for the Picoprojector platform, and at least one agreement for the Automotive HUD. Goals will be set for Color Eyewear when the greatest market need is identified and the type of product or products to pursue are determined.

Whether you think the company will meet their goals or not, they have been set and they are very clear: Sign agreements during 2006 to have OEMs incorporate the IPM into two new products. This will illustrate to the world that Microvision is here to stay and that the company's technology platform and intellectual property are going to generate money. The question (if you ask me!) will then become whether it's big money, gargantuan money or incomprehensibly huge amounts of money -- how many design wins, how many applications, how much global market share of the human-computer interface.

When you focus on something and work really hard at it, it becomes who you are and what you're about.

When you realize the potential of who you are, it becomes your destiny.

2 comments:

At February 22, 2006 at 9:44 PM Anonymous said...

Japanese are willing to try out new technlogy and are more likely to adapt any new display quicker than the American.

A lot of the new electronics we see in the US market has been test/improve in the Japanese market years ago before they launch in US.

 
At February 23, 2006 at 10:51 AM Ben said...

really important point.

thanks!

 

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